Employers’ trade union Ibec is calling for ‘decisive’ Brexit measures in the forthcoming Budget to prepare for what it describes as a potentially damaging UK exit from the EU, given the “frustratingly slow” pace of the negotiations between Teresa May’s government and the European Commission.

Ibec said that it has come up with several targeted measures to deal with the risks to Irish business. The measures, according to Ibec, would provide comprehensive supports to help companies trade through any period of disruption, as well as adapt and succeed into the future.

First, the organisation wants a multi-annual framework to deal with Brexit, so that the budget measures would continue through to the post-exit period. Within such a framework, Ibec is calling for a series of measures:

• Trade support measures, including export trade financing and export credit guarantees to support continued development of international export markets
• The extension of low-cost finance under the Cashflow Support Loan Scheme from farmers to firms, to allow firms to re-finance
• Increasing in-market and domestic supports for market diversification for Irish companies
• Introducing additional marketing and innovation supports for companies looking to reformulate, re-package or innovate their product lines for new markets
• Introducing direct supports for companies looking to re-tool and re-invest in plant and machinery in order to produce product lines for new markets. This should include accelerated capital allowances where appropriate
• Preparing a broader suite of measures to allow firms up-skill and develop their internal capacity to deal with any potential customs arrangements
• A temporary state aid regime, allowing for an enterprise stabilisation fund for viable firms in the event of a hard Brexit. This would enable short-term financing similar to the supports that were introduced in 2009 that helped firms through the financial crisis, and an increase in ‘de minimus’ levels of state aid.

Head of fiscal policy Gerard Brady said: “Negotiations have yet to provide any clarity as to what future EU-UK relations will look like. While we must work to ensure a close, positive relationship into the future, the risk of a divisive divorce is very real. We cannot afford to simply wait to see what happens. The government must introduce a range of measures to ensure the economy is prepared for all eventualities. 

“Brexit involves an unprecedented fracture of the Single Market, with Ireland particularly exposed. It is vital that both EU institutions and our own government fully appreciate the potential for economic disruption and take decisive steps to offset such risks. In order to support businesses during this difficult period, funding should be provided over a three-year period to help companies adapt. Funds should be targeted at supporting innovation, market diversification, upskilling and capital expenditure in equipment and machinery.

“A strategy solely based on diversification will not be sufficient to get companies through any period of disruption. Loss of UK market share, where it occurs, is likely to happen relatively quickly, while building new markets abroad can take years and even decades. Diversification also involves considerable risk and expense.

“Even in a best outcome scenario, margins will be tighter in new markets and cash flow needs will increase. Many companies which may be viable in the long term may not have the cash flow to survive the transition. This will require government support.”